Human mesoangioblasts are vessel-associated stem cells that are currently in phase I/II clinical trials for the treatment of patients with Duchenne muscular dystrophy. To date, little is known about the effect of mesoangioblasts on human immune cells and vice versa. We hypothesized that mesoangioblasts could modulate the function of immune cells in a similar manner to mesenchymal stromal cells. Human mesoangioblasts did not evoke, but rather potently suppressed human T-cell proliferation and effector function in vitro in a dose- and time-dependent manner. Furthermore, mesoangioblasts exert these inhibitory effects uniformly on human CD4+ and CD8+ T cells in a reversible manner without inducing a state of anergy. Interferon (IFN)-γ and tumor necrosis factor (TNF)-α play crucial roles in the initial activation of mesoangioblasts. Indoleamine 2,3-dioxygenase (IDO) and prostaglandin E-2 (PGE) were identified as key mechanisms of action involved in the mesoangioblast suppression of T-cell proliferation. Together, these data demonstrate a previously unrecognized capacity of mesoangioblasts to modulate immune responses.